Internet TV vs music vs newspapers

I love this on going discussion. Of course all of you who think that
the OPEN internet will be the primary platform for the delivery of
traditional TV content are wrong. But hey, that's what makes a market.

Before I get into dismissing some
of the traditional arguments why Online TV will take over, let me start
you with one that hasn’t been used. Rural Broadband.

Have you heard much about FTF - Fiber to the Farm ? or FTT - Fiber
to the Trailer ? If traditional TV is disintermediated by the internet
to the level of Newspapers or the Music industry you know what happens? The politicians are going to get slammed with complaints about lack
of access to Internet Delivered TV. Which in turn will mean the rest of
us subsidizing bandwidth and delivery infrastructure to BFE (yep, fiber
to there too). So be careful what you ask for.

And as far as al a Carte pricing, the discussion has been limited to
cable networks. But of course it's a slippery slope. Why stop there? As I wrote last year,
al a carte doesn't have to stop at the network level. Why pay for the
entire network when you don’t watch every show. Why have to pay for the
entire series of a show when you don’t watch every episode? Why have
to pay for the entire episode when you only want the parts you like and
you can get them segmented like you want on YouTube already ? Why have
to pay for all of sports center when you only want the segments on the
NBA ? Why pay for all of Saturday Night Live when you only want the
segments spoofing the President ? Why pay for all of Colbert or Stewart
when you will pay a little bit more to get the segment that everyone
votes is the funniest ? Where does it stop ?

But I digress.

Lets get to the comparisons to why subscriber supported TV will be
disintermediated just like Music and Newspapers have been. Content
wants to be free , right ? And if it can be free, it will be free.
Right ? If content is available for free on the internet, its over for
the incumbent producer of that content unless they adapt and adopt the
new internet based model, right ?

Music messed up by trying to fight the internet when it was
obviously inevitable that music would go digital. Newspapers may or may
not have messed up by making their content available online but with
the exception of the Wall Street Journal, which can move markets and
therefore support a subscription model, the cat is out of the bag,
newspaper content is free and on the net. Worse for the newspapers,
much of the information any given newspaper publishes, with the
possible exception of hyper-local, is readily available from multiple
sources across the net. In addition, the populist blog movement has
created an unlimited number of publishers on any given topic, and the
Twitter movement has added the real-time crowdsourcing of news and
opinion in a way that newspapers cant counter. Sound about right ?

All true. But none is relevant to the Traditional vs Internet TV argument. Here is why:

1. In both music and newspapers the internet option is the path of least resistance.

Used to be that you had to go to the store or an online store and
buy a CD. No instant gratification. The CD wasn’t usable in every
device you wanted to listen to music on. If you wanted to listen on
your IPod or your PC, you had to convert it to the proper format. Thats
time and work.

With newspapers, you had to wait for their delivery. Its just easier
to go to the net or your TV and get the news ,opinion or reporting you
want than to wait to see what is delivered to your door. While some of
us like the convenience of having new stories on a single platform, the
physical paper, for most people that is not important enough to them.

Time and Work are platform killers.

The path of least resistance to get TV, is turning on the TV. It
works. It works fast. It”’s reliable. The product is consistent and
equal for everyone. It is predictable. The best content is available
first on TV. The same can not be said for internet delivered TV. In
fact, its the opposite. You have to work to get your internet TV to
work. Which site has which content changes. Which content is actually
available changes. Internet TV quality is not consistent from usage to
usage. Internet TV requires upgrades to software to stay compatible
which creates work (your next flash/silverlight/quicktime upgrade is
when ?). The experience is not consistent from website to website. So
every time you want to sample something new, you never really know what
to expect. TV is the no work platform relative to Internet TV

2. For both music and newspapers the quality of delivery of
the content is as good or better on the internet than the physical
product

The experience of reading a news story online is not any worse than
reading it in a newspaper. Some may prefer a newspaper, but no one
feels like they lost something by reading it online or on mobile.

For music, the digital experience of listening to music from an
Ipod/Phone/MP3 player/multimedia PDA can be far superior to a CD, and
its rarely perceived to be worse. True, some audiophiles may not like
digital, but when you listen to your IPod, you get a very good audio
experience that you can enjoy anywhere. It can easily be argued that
digital is far better than the traditional CD method.

Thats not the case with TV. In just the past 3 years, the TV viewing
experience has improved considerably with HDTV and blu ray. But lets
put those aside since they are not yet ubiquitous. Traditional TV is a
better, more consistent experience than internet TV. As Netflix will
gladly tell you, the quality of your experience is dependent on the
quality of your connection to your ISP and the quality of your in-home
network. Things they have no control over. In addition they will tell
you that things that you or others are doing on your PC dedicated to
Online TV, or on other PCs on your in-home network, will impact the
quality of your experience. In other words, to watch TV, you have to
adjust your life and accomodate the PC based lives of others in your
home so that it doesn’t interfere withyour Online TV experience. With
Traditional TV, it works. You can add as many TVs as you want, and it
works at the quality levels you expect.

Internet TV doesn’t match the quality of Traditional TV. Now I know
what some of you are thinking. That all of this will be cured with the
upcoming onslaught of bandwidth and some undetermined amazing
technologies that have yet to be identified that will solve these
problems. Ok, when those things happen I may change my position. But I
don’t see them anywhere on the horizon right now. In fact, as I have
said before, I believe that the innovation that will occur for internet
video will be bandwidth consuming applications. Give kids 100mbs or
more of sustained bandwidth to work with and they will come up with
applications far more interesting than TV. Can you imagine the games
you could create ? The health care apps ?

3. Video advertising works better on TV than on the net.
Yeah, I said it. Deal with it. Look at the schlock that is passing for
advertising on the net. Im not talking about the ad content, Im talking
about the ad technology. You are watching a video and you get some
dumbass overlay at the bottom of the screen. That is the future of
internet advertising ? And do you realize that when you have ad people
producing video ads for the net, to create the quality of ads they want
to create, it still requires the same people/costs to produce a
10/15/30 second ad to run as a pre roll or inserted ad as it does on
TV. Remember, these are the same ad execs that are still producing ads
on 35mm film and only converting them to SD quality to run on TV. Do
you really think they are doing it any differently for internet video
ads.. Think again.

But wait , there’s more. Some have said that there will be untapped
geniuses creating new content for the net that will blow away the
content that is produced the old fashioned way for TV. That it will be
better, cheaper faster. Well I have a suggestion for all of those
people who put themselves in that category. Do it for ads first. Find a
video based advertising solution that knows which half of its ad budget
works. We aren’t talking a 30 minute or 3.5 minute video show. Just a
manner of advertising that can be produced in expensively and provide a
real source of revenue for all that amazing content that is going to be
produced on the net that people want to get paid for. Is that too much
to ask ?

But before you do that, let me offer one piece of info for you. You
would think that by now there would be some level of video
interactivity available for internet video, right? Hot spots ? Click
anywhere and go somewhere on the net ? It’s technically possible, but
99% of the internet isn’t compatible with them and the likelihood of
standards appearing in the next 3 years are slim. On the flipside,
there are real steps forward being taking , finally, with interactivity
on TV. All those set top boxes are digital. They run software like
Tru2Way. They really do track usage in a verifiable way that
advertisers trust (disclosure, I have an investment in Rentrak, a
company that does this). Things that the internet is capable of doing
with video, but for which Google has not really approved any standards.
Yep, think your reliance on Cable .Sat. Telcos is interesting ? The
future of internet advertising standards is in the hands of Google and
their Youtube volume.

In order to be sustainable as a platform, there has to be a
way to pay for it. TV is winning this battle and by all appearances is
advancing further, faster in a more standardized way than Internet Video.
Hard to believe, but you need to ask yourself “Who would you rather
depend on for open platforms and standards for advertising, google or
cable/satellite/telcos”.

I’ve been wrong before. But every time I look, everything points to
digitally delivered TV over cable/sat/telco advancing further and
faster than Internet delivered TV.